Workers suffer job-related injuries and illnesses every day, and these incidents negatively impact both employees and employers. Workers compensation insurance helps employers make sure any employees who suffer on-the-job illnesses or injuries can get their medical care they need and wage reimbursement they’re due.
Workers compensation insurance is generally paid for by employers, but this is an insurance coverage that truly benefits both parties involved. Employers receive protection from covered potential costs that could result from a job-related injury or illness. In some cases, these costs can be quite expensive. Employees get reassurance that they’ll be properly compensated if their work results in a covered injury or illness.
Insurance companies that offer workers compensation policies routinely perform audits on their policies. While this may sound daunting, the process is straightforward as long as a business’ books are accurate and in order. The purpose of these audits is to make sure businesses paid the right amount -- and not too much or too little -- for their workers compensation policy.
When a policy is offered, a premium is set based on wage and salary estimates provided by the business. During an audit, the insurer checks those estimates against what employees were actually paid. If there is a difference between what was estimated and what was actually paid, it’s reconciled. In some cases, this results in the employer being issued a balance due. Other times, it results in them being issued a refund.
Most states have laws that stipulate what businesses must carry workers comp, and Massachusetts' are quite specific. Broadly speaking, the laws base coverage requirements on how many employees a business has and what work those employees do.
Businesses with fewer than four employees generally don’t have to carry workers comp, unless they’re in certain industries. Those that work on construction sites of new single-family homes and detached residential buildings usually have to get workers comp even if they have only one to three employees.
Businesses with four or more employees generally have to carry workers comp, although businesses in some industries are exempt from this requirement. Those that employ domestic workers, farm laborers and/or casual employees normally don’t need to provide coverage for their employees.
Even if it’s not legally required, getting workers comp is often a good idea for any business that has employees. It’s both a responsible way to make sure employees are cared for if they sustain a covered injury or illness, and it’s a way to reduce the likelihood that those employees file a lawsuit. Employees who don’t receive workers compensation might seek compensation through suing, and just defending a business in such a lawsuit can be expensive.
While these are general guidelines, state laws may change and they must be applied to a business’ specific situation. Therefore, businesses should talk directly with an insurance agent who specializes in workers compensation before drawing conclusions as to whether they must carry workers compensation. An insurance agent will be able to provide informed guidance on coverage requirements and finding a policy.
In Massachusetts, sole proprietors usually don’t have to carry workers compensation but have the option to. Many may want to procure a policy because traditional health insurance may not cover work-related injuries. Thus, sole proprietors who forgo workers compensation might find themselves without coverage for medical care required to treat a work-related injury or illness.
For help finding workers compensation insurance, contact the independent insurance agents at Roger Keith & Sons Insurance Agency. Our agents have helped many companies find workers compensation policies, and they’re ready to assist your Massachusetts business with its coverage needs.